Gas Industry Accused of Price Gouging

Feb. 21 -- Whenever gas prices rise rapidly, there are inevitably questions about whether the industry is gouging consumers. This time around is no different.

Gas prices have risen for the past 10 weeks. In the past week alone, prices at the pump are up a nickel, bringing the national average to $1.66 a gallon, according to the Department of Energy. Gas prices are up 15 percent since January and dozens of cities around the country are reporting prices of more than $2 a gallon.

The American Automobile Association calls this gasoline price spike "uncomfortably" close to price gouging.

"Any time the price of gasoline reaches record-high levels then yes, I think it's fair for consumers to feel the price is being increased unfairly," said AAA spokesman Geoff Sundstrom.

Unreasonable Profit?

While state and federal investigators are looking into allegations of price gouging, so far there is no evidence to prove it. Price gouging is not an illegal practice. Prices are not regulated and are determined by what the market will bear, as long as there is no collusion or price fixing.

Big oil companies are making handsome profits on higher oil and gas prices, but the American Petroleum Institute says they are not profiteering.

"The important thing is to look at is, What's the profit margin? Is the industry making an unreasonable profit? Are we treating the consumer fairly? And I think the data would show yes, we are," said Ray Cavaney, the president of American Petroleum Institute.

Gasoline prices rise or fall with the price of crude oil. War jitters and the loss of Venezuelan oil due to a strike in the South American nation have helped push the price of oil to nearly $37 a barrel. Both gasoline and oil prices are up 15 percent since the beginning of this year.

But some gas station owners say they're not to blame for the higher prices at the pump. Their suppliers are charging them more, and they're merely passing those costs on to consumers.

"We're right there with the public," said St. Louis gas station owner Chris Kemph. "We'd like to see the prices lower as well. We're certainly not making any extraordinary profits."